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Jewish World Review April 24, 2002 / 13 Iyar, 5762

Bob Greene

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Consumer Reports

The answer: Get
fat and run away


http://www.NewsAndOpinion.com | This is just a wild guess, but I don't think most of you come to this space with expectations of astute financial advice or cogent economic analysis.

Still, once a year or so I attempt, in my muddled way, to make sense out of market trends. Last April, for example, when the dot-com collapse was under way and various retailers were undergoing a merchandising nervous breakdown, I pointed out the one company that was prospering beyond any CEO's happiest fantasies, and why.

The company was Krispy Kreme -- you know, the people who sell doughnuts -- and Krispy Kreme had just announced that its revenues had grown 36 percent from the previous year.

Why, in a volatile economy, was Krispy Kreme doing so well, while more traditional corporations were flailing about?

The answer was easy. A can't-miss formula for business success -- it said here -- was: Sell people something they crave, even though they know it's sort of bad for them. Sell it to them relatively cheaply. Make sure it's an item they'll buy not just once, but over and over.

As the dot-coms plunged and Krispy Kreme soared, it came down to an elementary business question:

What would you rather be selling: a doughnut or a modem?

But that was a year ago. As we all know, our world has changed. We are at war. It's not just the boardrooms that are jittery today -- it's the whole country.

So how do you make any business logic out of that?

Easy. All you have to do is examine the corporate annual reports that are currently being released.

There is a lot of unsteadiness -- companies are reporting herky-jerky results. They're all over the place, blowing in the breeze. Retailing, aviation, automobiles, financial services -- they're all holding their breath.

But two particular companies have done quite well in the last year.

One is Harley-Davidson Inc. -- the motorcycle manufacturer. The business press reports that Harley-Davidson announced record revenues and earnings for its first quarter. Shipments of motorcycles to dealers were up sharply from a year ago, and retail sales in the U.S. climbed 21.2 percent.

Another company doing well is Kraft Foods Inc. Even though its sales actually decreased, certain bookkeeping and acquisitions factors helped to more than double Kraft's net income. But more interesting than the accounting reasons was this:

Hopes for Kraft were said to be high because of the announced introduction of an Oreo cookie stuffed with half peanut butter filling, and half creamy filling.

All right -- how to make sense of this?

How to understand why overstuffed cookies and fast motorcycles are doing well, while longtime blue chip stocks are wavering?

It's easy:

In a time of warfare and jangled nerves, Americans like the idea of getting fat and running away.

It's true, and it's irresistible. We can't control the headlines; we can't do a thing about the maneuverings of combating nations. We feel helpless, adrift on uncertain waters; we are not the captains of our ships.

But we can dream about what we'd like to do -- about what would make us feel better. And what would make us feel better is:

Get fat and run away.

Swallow a bag or two full of Oreos stuffed with peanut butter and cream, jump onto a big old Harley, and roar off into the distance.

Scoff if you will. But businesses succeed because of how well those businesses meet the often-hidden desires of their customers. Customers reward that which, they perceive, rewards them.

Do you really have to ask yourself why Kraft and Harley-Davidson find themselves doing well?

Get fat and run away. The current American dream.

And when you get onto that Harley, no one's going to frisk you or send you through a metal detector.

Get as fat as you want and run away. On a Harley, you never have to worry about being assigned a middle seat.



JWR contributor Bob Greene is a novelist and columnist. Send your comments to him by clicking here.

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